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Innovation and policy align to scale virtual and digital health

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How the Cures Act helped set the stage for digital health care transformation. By Matt Wolf, Kurt Shenk and Davis Nordell

 

The potential of the digital health space is greater than it has ever been, thanks to the Cures Act of 2016—which allowed for more rapid digital transformation around health care data—along with the more recent growth of telehealth and rising ubiquity of cloud computing.

There seems to be no end of new health tech companies cropping up, and just as many investors clamoring for them. But this growth alone will not ensure success; the various players in the health care ecosystem need to work together to improve data interoperability if they want to fully realize this potential. 

The Cures Act was primarily designed to accelerate the discovery, development, and delivery of 21st century medical treatments and cures. Yet it laid the groundwork for many of the health data sharing and transparency requirements from the Centers for Medicare and Medicaid Services (CMS) and the Office of the National Coordinator for Health Information Technology (ONC).

The health care industry represents nearly 20 per cent of U.S. GDP, or almost $4 trillion, and generally lags other industries in terms of customer—in this case, patient—experience and value perception. Patients, providers, payors and other ecosystem stakeholders have long sought to transform health care. The opportunity for disruptive and transformative virtual and digital health solutions will explode as the health care ecosystem accumulates meaningful patient data that can be shared across various platforms. 

In 2021, 300 gigabytes of health care and life science data will be created for each person living on earth, according to the International Data Corporation. That represents about 1,000 hours of streaming video, the IDC estimates. The annual amount of data created in health care is expected to grow 36 per cent each year through 2025; total data creation will grow at a more modest 27 per cent. 

Cloud computing has further democratized access to this data. Organizations of all sizes can now meaningfully analyze health care data to develop new solutions, given the incredible cost savings cloud computing represents over traditional on-premises models. In fact, without such cost-effective and scalable computing resources, only the largest players would be able to provide digital or virtual health solutions, and many of today’s digital and virtual health solutions simply would not exist.

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When coupled with the rapid decline in cost of cloud computing, the Cures Act helped set the stage for health care’s digital transformation, which has been further accelerated by the COVID-19 pandemic.

The enterprise health and wellness technology sector is expected grow at 14% annually, reaching $1.3 trillion by 2025, according to PitchBook. This sector includes digital and virtual health platforms, primary beneficiaries of the deluge of (increasingly) interoperable data.

Investors cannot get enough, either. According to Rock Health, fundraising for digital health solutions in the first half of 2021 totaled $14.7 billion dollars, eclipsing 2020’s then-record year of $14.6 billion in funding. The average deal size has also increased to $39.6 million from $31.7 million. The Cures Act has been a key tailwind for the ecosystem and is incentivizing increased focus within the health care industry on the continued adoption of technology.  

The current state of health tech 

The health care ecosystem does not lack data, but it does lack meaningful data exchanges. While the interoperability of health data is improving, as suggested by a recent report from the College of Healthcare Information Management Executives (CHIME), there is plenty of room for further optimization. One-third of providers in a recent CHIME survey reported issues quickly accessing important patient data.

Adoption of the common Fast Healthcare Interoperability Resources (FHIR) standard of health data transmission, which is largely driven by health care’s largest payor—the federal government—is also helping organizations to better share data quickly. As shared data becomes more available, the opportunity for health tech solutions will explode.

It remains to be seen exactly what optimal interoperability might look like. It’s possible that patients will have access to and own all of their health data, perhaps on a blockchain. The benefits of this would include the ability of the patient to take the data and grant access to different physician offices, as access is required. We may also see large tech companies develop a platform-based approach to health care. Whatever the case, there will be a significant upside for the first mover in this space with the ability to provide the interoperability of data.

Those solutions around interoperability will also be crucial to allow providers—many of whom lack the skills to make meaningful use of vast volumes of patient data—to tap into this wealth of information. Connecting patient preferences and contact information to clinical data is still foreign to most providers. Data analytics and integrations such as incorporating customer (patient) preferences into service delivery are relatively new to health care.

Health care technology has a lot of ground to cover to catch up to a world in which people expect goods delivered same-day and can get approved for a mortgage in five minutes. Data integration will provide a profound opportunity for health care technology companies to “ride the wave” of data creation and capture value.

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Despite health tech data not being well connected today, there are some cutting edge technology companies that are making strides within the industry. One example is MediGuru, a cloud-based telehealth company that seeks to transform virtual doctor visits, providing an end-to-end platforming that does everything from gathering data from patient visits to creating the electronic health record, while also providing the patient a seamless experience.

As the amount of data in this sector increases, the ability to host the data in the cloud will become ever more crucial for the industry. This is not only a lower cost option in many cases compared to on-premises storage, but it also provides increased security and meets the requirements set forth by HIPPA and HITRUST. 

When working with third parties, health technology companies should be particularly focused on the regulatory compliance environment, particularly as it relates to data security. The European Union’s General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA) are two examples of regulations that health technology companies should ensure that they are following. Beyond their own companies, it is also important that a health technology company understands its supply chain’s adherence to GDPR and CCPA rules. These regulations raise the bar for protecting consumer information and require specific tracking from collection of data to disposal of data.

One way to ensure compliance in this area is for companies to periodically audit the current security and privacy strategies for the organization and its supply chain. Regular audits can help provide companies with tangible ways to execute their cybersecurity governance plan and the results from an audit often provide suggestions as to how a company can strengthen the controls within their organization.  

The takeaway

By enabling regulations to make data more easily available to players across the health care ecosystem, the Cures Act was a major leading indicator for the transformation of what was to come for the industry. Data continues to be created and collected at an incredible rate, and it is important for health technology companies to work with regulators in order to determine the optimal outcomes for the ecosystem. In doing so, health technology companies face an incredible opportunity to create, deliver and capture value as the legacy health care ecosystem transforms to meet the needs of the 21st century.

  • Chart 1 – Cost = cents per core per hour. Source: Oracle Open World Conference 2017, Bloomberg Intelligence.
  • Chart 2 – Source: Coughlin et al Internal Medicine Journal article “Looking to tomorrow’s healthcare today: a participatory health perspective”. IDC White Paper, Doc# US44413318, November 2018: The Digitization of the World – From Edge to Core”

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